Service Management

Flower of service
Development of New Services
 Flower of Services
Core , Facilitating and Enhancing Services

Facilitating services : Must for delivering core service

Enhancing services : Optional services add/enhance value of the
core service
Development of New Services

• Competition intensity and increasing customer

expectations force organizations to keep inventing new
offerings – process or performance- cost, response speed
• New offerings in service should bundle functional benefits
along with better experience to get success in the market
• There are seven categories of starting new services
starting from simple style change to major or disruptive or
radical innovation
• Major two types:
• Incremental : Gradual improvement/step wise
• Radical/Disruptive : Sudden, impacting more than one
industry, nearly 30% improvement in performance or
reduction in cost
Developing New Services -
Innovations

Types of Seven Service Innovation:

1. Style changes: minor changes- visible to bring about
motivation and excitement for employees and
customers. Typically they do not bring change in
performance or processes. Ex: color schemes in
restaurants, seating arrangement, logo changes.
2. Service improvements: Improving process or
performance for existing line of products. Ex: adding
online/card payments in addition to cash payment
3. Supplementary service innovation: Adding
supplementary services. Ex: Wi-Fi in Indian Railways
4. Process line extension: Making service low-contact,
to bring about speedy response. Ex: Self service kiosk
and e-distribution
Developing New Services -
Innovations

Types of Seven Service Innovation:

5. Product line extensions: adding to current product
lines. Ex: adding menu item, new routes in airline,
separate low-cost airline
6. Major/radical process Innovations : Using new
processes to deliver existing core service using news
ways with additional benefits ex: Uber, Internet based
commerce, face-book, online-courses (MOOCs), etc
7. Major service innovation: Introducing services not
existing in market. E-bay’s online auction.

Activity: List the types used by your company to

innovate new service offerings
New Service Innovations

• Reengineering service processes (BPR): Changing

sequence of steps, parallel, sequence, technology
adoption, cutting down idle time. Ex: CDM

• Physical goods as a source of new service ideas:

avoid owning by customers, renting out of machines,
financing for purchase, maintaining, repair, salvaging,
remanufacturing ex: Heavy machinery, Planes

• Using market research to design new service: to find

out the exact requirement, price limit, etc.. around which
the service offering can be built. Ex: Senior homes,
Home delivery of medical services, car washing at door
step, etc..
Development of New Services -
Stages
Front end planning
• Business strategy development
• New service strategy development
• Idea generation
• Concept development and
evaluation Implementation
• Business analysis • Service development and
testing
• Market testing
• Commercialization
• Post-introduction evaluation
Development of New Services -
Stages
Front end planning
• Business strategy development : To fit the overall
strategy, vision, mission and Technical and business
capabilities
• New service strategy development : Ansoff’s matrix
• Idea generation : Brainstorming, cross pollination,
catch ball, six thinking hats, customers, etc…through a
formal R&D dept.
• Concept development and evaluation: Step wise
process, time lines, role of customer and service
provider to visualize a tangible service offering
• Business analysis : Revenue and cost analysis/ CBA/
Resources/ Training/ Demand/supply analysis
Development of New Services -
Stages
Implementation
Service development and testing : construction of
prototypes, testing for customer feedback, blueprint
development of the service development and
implementation
Market testing: To check the 7p’s in the market, vary
price/other p’s and see the reaction, pilot test of
service, market rehearsal
Commercialization: Actual introduction into the market,
phase wise, efficiency of service personnel, CRM,
Revenue /profit monitoring
Post-introduction evaluation: Feedback analysis,
modifying the service, profit analysis, up-gradation of
service, 3G-4G service